Due to an ongoing
lawsuit between Canon and Nano-Proprietary, Toshiba may be forced to
suspend development and manufacturing of SED, or surface-conduction
electron-emitted display.

The pending lawsuit revolves around Nano-Proprietary's patent of the SED
technology and its licensing with Canon, Inc. Applied Nanotech, a subsidiary
of Nano-Proprietary, licensed out their SED technology for Canon to manufacture
exclusively -- not a Toshiba-Canon partnership.

That didn't stop Toshiba-Canon from announcing production would
start this past July, even though the joint venture did not have a
production facility. Japan Today reported earlier this morning the
groundbreaking on the Toshiba-Canon SED facility will likely be delayed due
to the legal battle between Toshiba-Canon and Nano-Proprietary.

The suit was filed in April of 2005 (PDF) with
Nano-Proprietary seeking a declaratory judgment that the manufacturing of the
SED by the joint venture of Toshiba-Canon, Inc. does not meet the details of
the non-exclusive 1999 patent license agreement granted to Canon, Inc. by SIDT.
SIDT changed its name to Nano-Proprietary shortly after the agreement was reached.

With billions in potential income resting on the outcome of the litigation,
Toshiba and Canon, Inc. hope for a quick resolution. A trial date
has been set for May of '07, but the two companies are said to be discussing possible
settlements. A motion to expedite the ruling was denied
in November 2006.

During a press release on December 20, Toshiba America said
the 55-inch SED demo would not be at CES 2007. No official information was released about why the
display was cancelled, but representatives from Toshiba stated in
notes sent to appointment-only viewers of the demo that the delay was neither
due to technical nor business-related issues.

Developers claim that the SED technology is able to deliver response times
under a millisecond. Another one of SEDs advantages include
the ability to produce TV's over 40 inches in diameter that are only a few
centimeters thick. The big selling point for the SED is the power
consumption is equal to about one thirds that of an LCD and can support full HD
resolution (1,920 x 1,080 pixels).

Expected launch of the Toshiba SED was scheduled for the fourth quarter of
2007, but Toshiba President and Chief Executive Atsutoshi Nishida since stated
that he wanted the company release SED displays in conjunction with the 2008
Beijing Olympics.